Bangladesh: Knit apparel exports exceeds the target

Overall exports of the Bangladesh recorded an increase of15.87 percent and accounted for US$14.110 billion in financial year 2007-08.According to the EPB data this growth is mainly driven by the performance ofthe RMG sector. Total exports earnings of the knit and woven apparel from thecountry recorded a significant increase in the Financial Year 08. Knit apparelexports from the country exceeded the target for the FY 08.

In the past fiscal year knitwear segment recorded anincrease of around 21 percent in their exports and accounted for US$ 5.532billion which exceeded the target of US$5.465 billion for the fiscal. Wovenapparel exports were of value US$5.167 billion with a growth of 10.94 percentand exceeded the target of US$5.400 billion.

Knit and woven apparel are the major exports item for thecountry and account for about 75 percent of the countries exports. Bangladesh is emerging as one of the major suppliers of the RMG in the world with theavailability of the cheap labour and inputs. Bangladesh is giving stiffcompetition to the neighboring countries.

Export performance in the knit and woven apparel segment ofthe country during the initial months of the current fiscal is indicating apositive trend for the industry. Although there is a slowdown in thedestination countries still in the month of June the exports of knitwearsegment were 24 percent up and approached to a value of US$603 million.

During the FY 08 better export performance was an outcome ofstable political scenario of the country as well as the steps taken by thegovernment to facilitate the sector and aggressive marketing strategies andbetter brand positioning in the US markets remained the key factors for thesuccess.

RMG exports of Bangladesh recorded a growth during the periodinspite of currency appreciation in year and also the rising input cost wherethe global fuel prices and domestic electricity and gas prices recorded asignificant increase. Exports performance of the sector was an outcome of the productivity and efficiency of the industry supported by absence of strikes as well as increasedport efficiency.

To facilitate the sector the government is providing technical as well financial support to the export oriented units. Various technologyupgradation and skill development programmes are run by the government with thehelp of the Japan to provide an edge to the sector at the quality front. In themonth of July this year government of Bangladesh with the help of AsianDevelopment Bank and World Bank created a 5 billion Taka (US$ 73 million) fundfor subsidized loans to the Small Medium Enterprise segment, out of which 10percent is necessarily to be allocated to the women entrepreneurs.

Bangladesh is emerging as one of the major sourcing destinations for the sweater itemsdue to rising cost of the Chinese production and appreciation of the Chinesecurrency as well as the reluctant behavior of the neighboring countries due tohigh labour requirement in the segment. According to the EPB data exports ofthe sweater products was US$1.47 billion during FY 2007-08 against US$1.24billion in FY2006-07. In anticipation of the heavy demand of these products players in the segment are extending their capacity to cope up the demand side pressure. 

Comparative performance of Bangladesh

Global exports of the readymade garments decreased by 11.64% in 2007 ascompared to previous year. Bangladesh stands at 160th position among the RMGexporting countries. RMG exports of Bangladesh in the year 2006 recorded anincrease of 29.31% as compared to 2005.RMG exports of Bangladesh had anincrease over the period 2003 to 2006 illustrating a positive trend in theperformance. India stood at the position no 7 and China remained at the topposition.

Source : NCTI